Welcome back to my blog. California is no doubt one of the most expensive states in America: all sorts of high state income and property tax, skyrocket housing and cramp living situation. But why are so many people, including myself, love to spend the rest of our lives here? Well, we are addicted to the beautiful weather, amazing sceneries, unlimited options for outdoor activities, foods, sports, and entertainment capital of the country. I happen to be in the market for house searching in the past two months, and I am shocked to find out how expensive it is to live here in Southern California. To not get confused, the houses we are looking at are strictly turnkey homes (or require very minimal money to upgrade), at least three beds and two baths, in a friendly/safe neighborhoods and excellent school systems. In terms of mortgages, I am referring to the traditional loan with 20% down and 30 years term. The interest rate is 3.75, assuming your credit score id above 700. Here are some interesting facts regarding house prices and mortgages in Southern California.
2 REGIONS ON THE MAPS
Red are areas towards Los Angeles. If you notice, I draw the line right between Pomona and West Covina. These areas include Yorba Linda, Anaheim, Long Beach, Costa Mesa, Huntington Beach. Heading West means more expensive housing because we are talking about beaches, cooler weather, and more entertainments.
Turn-key homes are pricing at around $700,000. Using the mortgage calculator provided by NerdWallet, which I found to be the most accurate, monthly payment is around $3,200 (Principle/Interest, Property taxes, Home owner insurance.) Based on the statewide median home price and current mortgage rates, the average mortgage payment in California will be approximately $2,542 at the start of 2017.
Blue are areas towards Inland Empire, San Bernardino area. Fact from Zillow: the median home value in San Bernardino is $296,200. San Bernardino home values have gone up 5.5% over the past year and Zillow predicts they will rise 4.3% within the next year. For a $300,000k home, monthly mortgage is at around $1,500. This is half the price compare to the mortgage for homes towards LA.
Related: WHERE TO BUY HOUSE IN VICTORVILLE , CA.
MELLO-ROOS
Cost: 2% of the total house value.
Don’t forget to ask about this when searching for homes. I don’t want you to be caught by surprise when it comes down to calculating exactly how much your monthly payments are going to be. New communities usually have this fee. According to CaliforniaTaxData,
Mello–Roos is a form of financing that can be used by cities, counties, and special districts (such as school disricts). Mello–Roos Community Facilities Districts (referred to as “CFDs”) raise money through special taxes that must be approved by 2/3rds of the voters within the district.
On average, Mello–Roos is limited to under 2 percent of your total home value. If a house is valued at $500,000, Mello-Roos can be up to $10,000 annually. It’s suck because Mello-Roos is something that will never go away during the life of the loan. For example, in the new Westridge at Sycamore Hills new community in Upland, houses are being built and they are in the low $500k. Their homes are beautiful plus there are many options to choose from. However, the Mello-Roos ranges from $3,700 to $4,200 per year. That’s equal to $308 to $350 per month in addition to the mortgage you are already paying. Homes with Mello-Roos will be harder to sell as well, keep that in mind.
H.O.A
Cost: $50 to $500/month or more.
You might already be familiar with the Homeowner Association. The good thing is that HOA tends to be cheaper than the Mello-Roos. Depends on areas, HOA can range from $50 to $500 per month. At where I currently live, my HOA is $50/month, and I think that is very affordable. I do like to live in community with HOA because there are some perks that come with it:
- Safer community: the association actually look out for the community,
- Parks: some might have parks just like mine does where you can walk your dog or kids can play inside
- Swimming pool.
SOLAR PANELS
Cost: $13,090 to $17,710 to purchase
As of Jan, 2020, California has taken the final step to be the first state in the nation to require solar panels on new homes. According to Energysade, as of October 2019, the average solar panel cost in California is $3.08/W. Given a solar panel system size of 5 kilowatts (kW), an average solar installation in California ranges in cost from $13,090 to $17,710, with the average gross price for solar in California coming in at $15,400. The good news is that solar gets cheaper as technology improves. Ten years ago, solar panels can easily cost up to $30,000. You can either lease it or purchase the whole thing. People tend to do both ways, depends on their financial situation.
That’s it, guys. I hope you enjoy this little post. I am working on creating a free product for you guys. Stay tuned.
Thanks for giving us some idea. It is always great to compare your prices there with the prices here. The prices are not bad actually so see you may be in the future? Hehe
This is very informative and properly presented. If I’m going to live in California, I want to have a sea view, but that’s going to be so expensive. I have a lot of family in California. Personally, I wouldn’t stay there if I were ever to think of moving to the US.
I prefer the East Coast. I love New York. I love the vibe in those parts of the country.
I used to spend 4 years in the Eastcoast, Boston areas. I love it but it got too cold for me 🙂
Great info for anyone looking to buy a house in so cal. I live in the south so our housing market is so different.
I see, well thanks for stopping by anyway. Hope this info can help someone out there 🙂
Nope, I’d be dead in the water. Wisconsin is MUCH different! Thanks so much for sharing this with all of us!
I had no idea that CA required new homes to have solar panels. That’s awesome! They really need to do that out here in Phoenix, AZ where the sun is not our friend. I’m glad I bought my house when I did though because the market has just been going up. This is a great post!
I liked this concept of how you compared the prices.I do not belong to US so wont be much useful. But I am sure others will be. You put forward a good concept
I am glad I don’t have to move to CA cause those prices are really up the roof 😮
I had no idea about this in Southern California. Its great information for those living in the area. Its good to know there needs to be a solar panel.
I wish I could think about this. I live in Canada, but thinking about moving to LA next year. I hope I can afford it.
It’s all about budgeting. Right now I have to limit my credit card spending to be under $500/ 2 weeks. and other things as well.
Honestly, we’ve never considered it before, but we do know someone who has. It’s interesting to see how much of a difference the market is from South Florida.
Eeeek! We’re moving from South Africa to Canada and the property system is so different. All the different taxes etc. I’ve made provision for quite a big contingency fund, but I am still really nervous about all the additional costs.
Wow that’s a big move. Congrats on such huge decision. I am not familiar with Canada’s real estate. But I hope they are not as expensive as southern CA
I didn’t know about this. This is such an informative and helpful post for those who are interested to live in California.
Great news for those who are living in that area. I am sharing this article hope this will help someone who is looking for same information
Thank you Sundeep
I have no idea in this area. And now I am full of great tips after reading this article. It’s really informative. And those home with solar panel looks great. and affordable. Thanks for sharing this guide!
A very useful reference for those dreaming of living in southern california.
My family just moved from Southern California to Arizona and the real estate prices are much different.
I bet. CA is getting more expensive as economy grow
Very informative. Sometimes I am thinking to move in there. or take a visit and see what they got. I didn’t notice that there’s a mortgage like these in there. Thanks for this very informative article!
Thanks for checking this out. Mortgage is high, crazily high
This is very affordable. I never think of this one. I always though every map in California has an expensive price. But this one is a great deal .
We were considering an option of moving to CA) thanks for opening my eyes on some things to ruminate about.
The solar only apply for the brand new house starting 2020. Old house still doesn’t need solar
It’s pretty awesome that California requires new homes to be solar powered. However it is pretty expensive to live in Southern California.
It is..I constantly asking my self that question: Am I crazy for paying that much monthly…
Wow I didn’t know California was going to be the first state to require solar panels. Cali seems extremely expensive especially with HOA fees that can rack up to $500 that’s nuts.
Informative article. I have never been to California. It is good to know there needs to be a solar panel.
Yeah, it’s sucked but that’s what the state decided on and we all have to pay for it
This post is helpful for anyone looking to buy a house in so California. I always wondered what the prices for mortgage was.